| Term |
Definition |
| Lease |
A contract between an owner and a tenant stating the payment amounts and other stipulations of occupancy for a specified period of time |
| Lease purchase |
An option made to assist low income tenants achieve home ownership by giving them a lease with an option to buy; the rent payment consists of the regular monthly payment, but with an additional amount that is credited to an account for use as a down payment. |
| Lender |
The bank, mortgage company, or mortgage broker offering the loan. |
| Liabilities |
An individual's financial obligations, such as bills, debt, etc. |
| Lien |
Any claim against a property, including mortgages, unpaid taxes or repair bills or other unpaid charges. Prospective property buyers conduct a title search to determine whether any liens against the property exist. A lien must be filed or recorded with the local county government to be attached to a property title. |
| Lifetime cap |
A provision of an ARM that limits the highest rate that can occur over the life of the loan. |
| Liquid asset |
Cash, or any other asset that can be quickly and easily converted to cash |
| Loan acceleration |
A clause in a mortgage contract that allows the lender to demand full payment of the entire remaining balance of the loan if one payment is missed |
| Loan |
Borrowed money with an agreement between the lender and borrower to pay it back, usually in scheduled payments with interest |
| Loan acceleration |
A clause in a mortgage contract that allows the lender to demand full payment of the entire remaining balance of the loan if one payment is missed |
| Loan servicer |
The organization that collects mortgage payments, bills borrowers for property taxes and insurance payments, contacts delinquent borrowers, and notifies insurers and investors of potential problems |
| Loan-to-Value |
A ratio calculated by dividing the mortgage amount by the value of the property. A lender will often use the lower of the purchase price or the appraised fair market value when the loan is used to purchase a property. |
| Loan to value ratio (LTV) |
The ratio of the amount of your loan to the appraised value. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders. |
| Lock-in |
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing. |
| Lock period |
The amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time, usually for 30, 45 or 60 days. |
| Loss mitigation |
A process meant to help a borrower avoid foreclosure |
